There are many Americans these days kicking around the idea of filing for bankruptcy. Just looking around it's obvious why so many people are struggling to pay their bills. Between 2002 and 2008 the credit industry freely gave anyone credit, even your dog if he applied. The idea of rebuilding our country after September 11 was to go out and shop. And that's exactly what happened, many Americans wanted to do their part to help the economy as they ran up their credit cards to the max. When that credit card got tapped out, just open up your mail and you'll have another one with a larger limit to transfer your balance to and keep going.
It's no surprise that 1.5 million people in America had to file for bankruptcy in 2010 alone. This happened with the housing market also as the government was saying that everyone deserves to own their own home. The housing market was going up at 25% a year as average people over extended themselves buying homes they couldn't afford. Then it happened, the snowball got pushed off the hill and started rolling. The banks and investors realized that all this was unsustainable and all the paper that was out there was junk. To avert a so-called disaster, the Fed fired up the printing press to bail out the banks before they ended up in bankruptcy. I don't understand why it's the taxpayer's responsibility to bail out an organization that made bad financial decisions. I'm still checking my mail to see when I was going to get my stimulus check.
Here we are in 2011 and many people are still waiting to get a job. Some of these people have lost the ability to collect unemployment and are living on their 401(k) or retirement. This is a huge mistake. I know people are trying to do the right thing by paying their bills and being positive. That's what makes America great, is the attitude of the citizens. This is where reality needs to set in, before an individual starts burning through their savings and retirement, they should consider filing bankruptcy. Many of these assets are protected by bankruptcy exemption laws and would not be taken when filing Chapter 7 bankruptcy. People that have been unemployed for an extended amount of time would probably easily qualify for Chapter 7 bankruptcy. When an individual starts drawing or borrowing from their retirement it is considered income according to the bankruptcy code. If the debtor decides to file for bankruptcy after drawing from these accounts they might not qualify for Chapter 7 bankruptcy. This is where a bankruptcy attorney is a huge asset to advise a debtor in this situation of which way to run. Before cutting into the meat of your assets, consult a bankruptcy attorney for their opinion on your financial situation.
Don't let the creditors scare you into paying them money that you don't have. Creditors want the debtors to believe that they are lowlifes if they file for bankruptcy. You have to remember what's at stake here, when a debtor goes into a bankruptcy filing the creditor will no longer be able to even call the debtor. No more, how about $100 this week and whatever you can give next week. They know that once the debtor is filing bankruptcy along with being represented by a bankruptcy attorney the game is over. When the debtor receives the bankruptcy discharge, all unsecured debts will be completely wiped out. This means they get nothing. That is why they fight so hard to misinform debtors about bankruptcy.
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